How Is China’s Drug Approval Agency Outpacing International Counterparts? It’s Complicated

Is China about to outpace the US? We’re not talking about trade, but about the Asian giant’s new and—from what we can tell—efficient drug approval process.

The nation seems to be on a roll. In the first nine months of 2018, the China Food and Drug Administration (CFDA) approved no fewer than 37 new drugs, the vast majority of which were produced by foreign manufacturers. That’s a little shy of the FDA’s 41 approvals in the same time period. But compared to the six drugs China approved in 2016, the improvement in approval speed is notable.

Not only is China beating its own records, it is beating other countries in bringing drugs to market. Last December, China granted AstraZeneca (AZ) and FibroGen, two global pharmaceutical companies, approval for the new drug roxadustat before any other country. It was the first time that China approved a drug before a Western nation.

How has China achieved such outcomes, and what are the implications for the FDA? The lessons are not as straightforward as they might appear. What initially looks like the result of smart reforms and streamlining may actually be the harvest of low-hanging fruit and preferential treatment.

Sweeping Reforms and Record Approval Times

China’s new drug approval speeds come on the heels of a deliberate series of reforms. In 2015, the CFDA (through its Center for Drug Evaluation, or CDE) updated its operations. It implemented a priority review process to fast-track approval for drugs targeting unmet medical needs. It allowed for the Phase I trials of generic products to be conducted on sites that have not been formally vetted by the government. It also rolled out a silent approval process that allows clinical trials to begin 60 days after placing a new drug application if no objection is raised on the CFDA’s end. Finally, it increased the reviewer workforce eleven-fold over two years, from 70 to 800, with more hiring planned for future years.

Before these reforms, the CFDA’s drug approval process was marked by decades of lags and slow processes. Now, the pathway to Chinese drug approval has never been smoother.

In 2018, the average drug approval took just over three years. Drugs that received priority status, meaning they meet an unfulfilled medical need, took an astonishingly short 16 months for approval. In comparison, the FDA takes an average of 12 years to approve a new pharmaceutical compound.

While it is tempting to credit China’s improvements in drug approval time to procedural reforms, it would be a mistake to consider these reforms in an international vacuum.

These improvements are groundbreaking for China, but the US FDA has had similar policies in place for many more years. The most notable factor behind the record approval times seems to be the substantial increase in personnel over those years. Can that be the only explanation for such a performance?

A Success Story with Unclear Success Factors

There is indeed more to the success story than the CFDA’s important reforms.

In preceding decades, the CFDA had been notoriously slow to allow the domestic marketing of drugs approved abroad, lagging behind the US by an average of seven years. The best available research suggests that many of the CFDA’s newly-approved drugs were manufactured by international pharmaceutical companies: 50% in 2016, 97.5% in 2017, and 81% at the end of the third quarter of 2018. These drugs had already undergone many clinical trials, had been vetted by the approval authorities of various other countries, and had been used by patients for years without safety issues.

In other words, China was in the fortunate position of being able to piggyback on other countries’ pharmaceutical testing and clinical experience. It remains to be seen whether the CFDA’s approval times will continue on a downward trend after that low-hanging fruit has been harvested.

Another source of uncertainty is the performance of clinical trials at facilities that have not been inspected by the government. While it speeds up the approval process, it’s not yet clear that the procedure comes without safety concerns.

At first glance, the AZ and FibroGen developments provide reason for cautious optimism, but with an eye toward monitoring patient experience in the field. Roxadustat is premiering in China without having undergone clinical trials anywhere else in the world. The FDA has not received an application for roxadustat yet. For the first time, Chinese consumers got access to a foreign drug before anyone else in the world.

There is a further wrinkle in the AZ/FibroGen case study: the CFDA allowed the two pharmaceutical giants to submit clinical trial results on a rolling basis. This feature was not part of the CFDA’s sweeping set of reforms, which could mean the companies received a special privilege to proceed in China. If future foreign offerings do not receive the same treatment, China’s drug approval process could very well stall.

What This Means for the US FDA

With these reforms, China has managed to position itself as a place of choice to launch new medical products. Whether this reflects highly effective reforms, preferential contracts with international companies, or a mixture of both remains to be seen. The United States shouldn’t leap to adopt the procedures that have contributed to China’s accelerated drug approval times.

But the changes are well worth monitoring. Given the rapidly-improving clinical trial methods developed by innovative companies, America’s current 12-year average approval time is increasingly difficult to justify (and will certainly lead some Americans to seek drugs from China or elsewhere).

The US FDA (and the legislative and executive officials with authority over the FDA) should take a hard look at the agency’s operations, technology, and processes, identifying potential improvements so American patients can safely access state-of-the-art treatments when they need them.

One way to revamp American drug approval is to reshape the FDA’s role. Mercatus Center senior fellow Adam Thierer points out that policymakers originally intended for the FDA to act as a safeguard against unsafe healthcare procedures and products. Today, he argues, the regulatory body acts as a bottleneck that unduly burdens medical companies and restricts patients’ access to healthcare, slowing down innovation and inflating prices.

By giving consumers and providers a greater say in the approval process, innovation can flourish and the FDA can dedicate its efforts and resources to the monitoring and information-sharing role it was intended to play.

Small tweaks to the current system won’t cut it. Thierer argues that the FDA should shift its focus to risk education and assist consumers in making informed decisions, instead of defaulting to barring access to innovative treatments. Mercatus author Marc Joffe suggests that the FDA should also foster competition by moving away from single-source generic manufacturing and allowing several manufacturers to produce and distribute the same generic drug. Mercatus scholar Robert F. Graboyes argues, in light of its failure to foster innovation, the FDA should be replaced, and other Mercatus research finds that the approval system should depend upon premarket private approval entities, postmarket consumer feedback, and tort.

By giving consumers and providers a greater say in the approval process, innovation can flourish and the FDA can dedicate its efforts and resources to the monitoring and information-sharing role it was intended to play. Then, the US can continue to be a leader in healthcare technology, while maintaining high quality standards and lowering the cost of making treatment available to more patients.